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Friday, June 8, 2012

Glencore chief defends big executive pay

Mr Glasenberg, the second-wealthiest Australian behind Gina Rinehart
with a fortune valued at more than $6 billion, said Labor's imposition
of a carbon tax and a mineral resources tax had undermined the country's
traditional advantages over riskier investment destinations in the
Third World.

Mr Glasenberg told a mining industry dinner in
London that Australia was no longer seen as such a stable investment
environment, and that major international mining companies had the
further disadvantage of not enjoying the same leverage in Australia that
they held when dealing with poorer countries.

“At least in the
Congo they need you, they want you there and if they start changing the
rules on you, you may not continue investing. In Australia your $3
billion is not that big,” he said.The most influential people in Sport

The
South African-born executive, who gained an Australian passport while
working in Melbourne, refused almost all requests to speak in public
when Glencore, the world's largest commodity trader, was a private
partnership. But following its public listing last year he agreed to
address the London gathering of 550 executives at a function of the
Melbourne Mining Club.

Glencore won’t be allowed to vote its 36.5
per cent holding in Xstrata on the deal, according to the UK’s takeover
code, meaning Xstrata investors holding a combined 31.75 per cent stake
could join forces to block the takeover.

“If I was a CEO and my
shareholders voted down my salary, my compensation, because they didn’t
believe I was worth it, I think you’ve got to resign,” Mr Glasenberg
said.

Mr Glasenberg, who would become deputy CEO in the merged
company, said it was up to Xstrata whether the payments can be adjusted.

“It
has to get a 50 per cent vote and I hope it gets it,” he said at a
dinner organised by the Melbourne Mining Club, a non-profit group that
promotes the mining industry.

Glencore has also faced calls from
Xstrata investors including Schroders, Fidelity and Standard Life to
increase its bid for Xstrata, the world’s largest exporter of coal
burned by power stations.

Switzerland-based Glencore is offering
2.8 of its shares for each Xstrata share. Glasenberg said yesterday that
the ratio is “good”.

Glencore, the world’s largest publicly
traded commodities supplier, sold $10 billion in stock at 530 pence
apiece in an initial public offering in May last year, ending more than
three decades of operating as a closely held partnership. Mr Glasenberg
has a 15.8 per cent stake, valued at about $6 billion at current prices.

A
combined Glencore and Xstrata would have operations and projects in 33
countries, including 101 mines and more than 50 metallurgical
facilities. It would have about 130,000 workers.